Who is a casual taxable person?
A casual taxable person is a person who occasionally undertakes transactions involving supply of goods or services in a state or a union territory where he has no fixed place of business. He may work in such state or union territory as a principal, agent or in any other capacity.
All such persons having some temporary work or assignment in state or union territory (not being their principal place of business and not being already registered there), should mandatorily get registered as Casual Taxable Person in such state or union territory. There is no threshold limit for registration. So, registration is mandatory irrespective of the turnover of the work/assignment in such state or union territory.
For instance, an event management company called Shine organizers having the principal place of business and registration in New Delhi gets a wedding contract in Chandigarh, Punjab. They are not having registration in Punjab. So in order to undertake this contract, they need to get mandatorily registered in Punjab as Casual taxable Person before commencing their work in order to take input tax credit of SGST(State goods and service tax) of expenses incurred in Punjab.
Benefits of registering as a Casual Taxable Person
If a business opts for normal registration in such cases, then they will have to file nil returns and adhere to all compliances as required of a normal registered taxpayer. Alternatively, for all such infrequent or one-time transactions, the supplier can obtain registration as a Casual Taxable Person in that state and pay the tax liability in advance on presumption basis. This will make the buyer eligible to claim input tax credit without increasing the burden of compliance.
A casual taxable person cannot exercise the option to pay tax under composition levy.
Procedure for registration as a Casual Taxable person
In order to obtain registration as Casual Taxable Person, following points must be noted:
- Applicant must apply for registration at least 5 days prior to commencing his work in such state or union territory.
- The normal Form GST REG-01 used by normal taxpayers can be used for applying for registration as Casual Taxable Person. There is no other separate form for applying registration as Casual Taxable Person.
- Person has to declare his Permanent Account Number(PAN), mobile number, email address, state or union territory in Part A of FORM GST REG-01, before applying for registration. The PAN will be validated online by the Central Board of Direct taxes. The mobile number and email address will also be validated by sending one time password to such mobile and email address provided in the Form.
- On successful verification of the Permanent Account Number, mobile number and e-mail address, a temporary reference number shall be communicated to the applicant on such mobile number and email address.
- After getting the reference number, the applicant should electronically submit an application in Part B of FORM GST REG-01, duly signed or verified through electronic verification code along with the documents specified in the said Form.
- The applicant is required to make an advance deposit of tax in an amount equivalent to the estimated tax liability for the period for which registration is sought.
- The registration certificate shall be issued electronically only after the said deposit appears in the electronic cash ledger of the applicant. After depositing such amount, an acknowledgement for registration shall be issued electronically to the applicant in FORM GST REG-02.
Validity and Extension of Registration as Casual Taxable Person
The registration as Casual Taxable Person shall be valid for a period specified in the application or a period of 90 days from the date of registration whichever is earlier.
In case the Casual Taxable Person wants to extend the period of registration, he can do so by submitting an application in Form GST REG-11 before the end of the validity of registration granted to him. The registration period can be extended further by a period of not more than 90 days. The extension will be allowed only on the payment of additional estimated tax liability for the period for which extension is sought.
Returns to be Furnished by Casual Taxable Person
The Casual Taxable Person is required to furnish the following returns for the time period for which registration is granted:
- Form GSTR 1- The details regarding the outward supply of goods or services shall be provided here. This return is to be filed on or before the 10th of the following month.
- Form GSTR 2– The details regarding the inward supply of goods or services shall be provided here. This return is to be filed after 10th but before 15th of the following month.
- Form GSTR 3– The details in this return gets auto populated from GSTR 1 and GSTR 2 and it the shows the amount of tax liability. This return is to be filed after 15th but before the 20th of the following month.
Casual Taxable Person is not required to file Annual Return as required by the normal registered taxpayer.
In case the amount of advance tax deposited by Casual Taxable Person at the time of applying for registration exceeds the amount of his actual tax liability, then he shall be given refund of such excess amount of tax paid. But in order to claim such refund, he must file all the returns in respect of the time period for which registration is granted. The refund shall be claimed in the serial no 14 of Form GSTR 3.